Scott R. Grossman
Founder of Vindico Capital, Consumer-Sector Investor
Aurora Cannabis still trades about 10% below the value of Curaleaf's sweetened hostile bid. Curaleaf raised its offer to 0.4013 shares plus $1.00 cash per Aurora share, and even after Aurora jumped 14%, the spread sits at about $0.46. On September 8, the spread on the original terms was about $0.35, or 9%. x.com
ADT's go-shop suggests it was not widely shopped before the $10 cash take-private, leaving a speculative chance of an overbid. The 30-day window ends November 28 and may extend 10 days for qualified bidders; its low-growth but entrenched, stable security business trades at 5.5 times EBITDA and might interest Google or Amazon. December $10 calls are lottery-like and usually expire worthless; the merger proxy has yet to disclose the sale process. x.com
Cannabis stocks offer an excellent entry point after a procedural pause in the DEA rescheduling hearing triggered near-panic selling. The industry has never been closer to rescheduling and resolving custody and uplisting issues, and it recently refinanced its debt on excellent rate and duration terms. The pause until October 13 may delay rescheduling somewhat but is unlikely to derail it, and institutional investors should begin entering over the rest of the year. x.com
MSOS's underlying cannabis operators burn cash, dilute shareholders frequently and have poor management, so waiting for US regulatory reform still entails substantial time decay. x.com
Cannabis is the least efficient pocket of the market, an opportunity for patient retail investors because long-term institutions and money managers do not yet care about the sector. That is why the stocks did not jump on rescheduling. @aaronvalue adds that so few eyeballs are on the space that investors face almost zero competition. x.com